WORLDWIDE ADVERTISING: Brazil - room to breathe. Jane Austin on the possibilities of a developing market in a big country with big opportunities

While Ronnie Biggs has tired of sequinned g-strings and has left

Brazil to sample British hospitality, Brazilian media players see the

country as a land not only of golden bodies, but of golden

opportunity.



According to Percival Caropreso, executive vice-president, general

manager and executive creative director (big country, big job titles) of

McCann-Erickson Brazil: "There is a lot to grow and there is room for

expansion that is not easy to find in big societies around the world

currently.



This opportunity landscape is especially true due to the stability of

the Brazilian economy, which offers low but controllable inflation and

slow but consistent social improvements. Total advertising investment

last year was around dollars 8 million, which gives a per-capita

investment of approximately dollars 50 - offering room to grow. The

political scenario is still a problem, but dictatorships, coup d'etat

and political uncertainty have been banished forever."



Caropreso adds: "But only 50 per cent of Brazil's 165 million

inhabitants can be deemed as active consumers who are responsible for

moving the Brazilian market." This is due to "an unfair social

structure, a mean wealth distribution and a high level of illiteracy".

While a problem, Caropreso believes that this gives the indigenous

market more opportunities.



Jonathan Barnard, the knowledge management manager at Zenith Media, says

that the Brazilian economy is "recovering from the near-stagnation of

1998 and 1999, but so far the recovery has been moderate". He adds: "In

the first half of 1999 industrial activity grew and lower-than-expected

inflation allowed the banks to cut interest rates. Lenders were more

willing to offer credit and consumer confidence strengthened,

stimulating renewed domestic consumption. These positive signals brought

with them new inflationary pressure, so the central bank has had to

tighten its grip on money supply again."



Zenith's forecasts for the period 2000-2003 show that the Brazilian GDP

is expected to rise to 4 per cent per year, which is better than the 0.8

per cent growth of 1999, but not that much for a developing country with

an annual population growth of 1.4 per cent.



Brazil's currency, the real, is now more stable against the dollar, and

this, predicts Zenith, should allow the dollar-measured ad expenditure

to return to the strong position it held before the economy came to a

halt in 1998 due to a crisis of confidence concerning emerging

markets.



According to Zenith's forecasts, Brazil's newspapers and magazines are

healthy. Daily newspapers have been raising their combined circulation

since 1997, with several magazines launching successfully.



Ad expenditure in newspapers and magazines has returned to growth after

a decline in 1999. But they are not keeping up with other media and are

particularly losing out to outdoor as new sites are constructed. There

are now more than 35,000 sites across the big cities and there is a

growth in mediums such as bus shelters, banners, building decoration and

decorated buses. The print sector accounted for 33.7 per cent of the ad

market in 1999 and outdoor for 5 per cent; by 2003 Zenith expects their

shares to be 32.5 per cent and 6.1 per cent respectively.



Angelo Franzao Neto, executive vice-president and general media director

of McCann-Erickson Brazil, says that the magazine market boasts more

than 2,000 titles; VEJA (a general interest magazine) from Editora Abril

is the largest with sales of more than 1.5 million issues per week.



"Editora Abril is the largest publishing company and is responsible for

60 per cent of the magazine market. Second is Editora Globo, part of the

O Globo Communications Group, at 15 per cent," he adds.



There are more than 1,000 newspapers in Brazil. Folha de Sao Paulo

(circulation 442,000), O Estado de Sao Paulo and O Globo (circulation

401,000) are the largest, but none have a national average because of

the cultural and geographical diversity of the country.



When it comes to radio, Brazil has more than 3,000 stations, most of

which are AM and cover all 5,000 cities around the country. Some 87 per

cent of Brazilian households have a radio with an average adult

listening time of 320 minutes a day. Due to the medium's significant

popularity, radio networks via satellite are emerging.



Brazil has six large TV networks. Rede Globo concentrates on 60 per cent

of the general audience, while the in second place SBT has 20 per

cent.



Some 86 per cent of Brazilian households have a TV and adults view an

average of 180 minutes per day. Pay TV is an expensive luxury with just

under four million homes subscribing to it. Only 6.4 per cent of the

population boast a cable connection.



Due to the opening of the Brazilian economy and to the globalisation of

media channels, Brazilians have an open mind to consume and digest

communication. "We still have strong local and parochial patterns, but

the younger generation of Brazilians will have eyes and minds that are

broader than the borders of Brazil," Neto adds.



Caropreso believes that the launch of independent media companies is

having a significant impact. "Fragmentation is a fact as a lot of

isolated media companies and new vehicles have grown tremendously. These

independent media companies are also starting informal networks, getting

together to offer more options to clients. For example, one radio

company plus an independent TV with a local newspaper and an Internet

portal." He states that these are not official groupings but "a

commercial scheme to compete with large groups".



Consequently, a few communications groups are beginning to offer

cross-selling packages that include several channels.



Caropreso concludes: "Brazilians consume media a lot. We are heavy users

of all communication vehicles, channels and formats. The challenge is

expanding and distributing the richness, the money and educational

conditions to all Brazilians - a task that can be achieved more easily

with communications."



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